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The Nifty 50 witnessed a rollover of 65 per cent but the Nifty 50 February contracts closed at a discount of seven points at 11,062.60, against the Nifty spot close of 11,069.65. This signals, that ahead of the Budget, traders had rolled over short positions to the February derivative series.
The Union Budget will be announced on February 1.
Traders allowed more positions of the current series to expire on Friday (on the settlement day of January contracts), as the index climbed to historic highs during this series.
Rollover in the Nifty 50 was 73 per cent last month, while the three-month average was around 70 per cent.
“They, mainly traders, prefer to book profits rather than roll over their positions ahead of the Budget, on which they have low expectations after Prime Minister Narendra Modi had indicated a cautious signal,” said a market participant based out of Chennai.
“Rising crude prices and surging volatility index (fear gauge) also forced them to wind up their long positions,” he added. Brent crude almost hit $71 a barrel for the first time since 2014 while India VIX, the volatility index, is hovering at a near- 14-month high at 17.5.
FIIs turn buyers
However, FIIs have turned buyers in the cash segment. For the first time since July 2017, the reversal in trend was witnessed as FIIs pumped in a buying figure to the tune of about ₹950 crore, while domestic institutions pulled out about ₹704 crore, said a note by IIFL.
Despite a sharp correction in PSU banks on Thursday, Bank Nifty witnessed a rollover of 70 per cent, but still lower than last month’s 75 per cent.
Shares of PSU banks were down on Thursday as the Centre’s capital infusion plan failed to impress the market. Analysts and investors feel that the move will widen the fiscal deficit target. The Nifty PSU index slumped 5 per cent and closed at 3,757.70.
The Bank Nifty February futures closed at 27,374.25, against the spot close of 27,445.65, also signalling rollover of short positions to February series; the January contracts closed at 27,440.45.
Option chain
Nifty option chain indicates that the Nifty 50 index will see a resistance and could move in a range of 10,500 and 12,000 where the concentration of open interest has been higher.
While build-up of longs was seen in Exide Industries, Infosys, Titan, Shree Cement and Cholamandalam Finance, counters such as Idea Cellular, Indian Oil, Pidilite Industries and Bharti Infratel witnessed build-up of shorts, said the IIFL report.
Tata Communications, Suzlon Energy, Jet Airways, BPCL and Indian Bank had seen winding up of long positions, the report further added.
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